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Sainsbury's Q1 sales decline due to food price deflation

Published:  10 June, 2015

Sainsbury's sales declined for the sixth consecutive quarter with total retail sales down 0.6% and like-for-like sales down 2.14%. driven primarily by food deflation.

Figures are for the last 12 weeks ending 6 June 2015, with the chief executive officer Mike Coupe, blaming the ongoing supermarket price wars for the sales decline.

"Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop. These pressures including the effect on our targeted price investment, have led to a fall in like-for like sales for the quarter," he said.

It is not all bad news however according to Coupe as "volume and transactions continue to grow."

The convenience and online retail channel has also helped the grocer offset sales losses.The retailer opened 20 grocery click & collect sites in the first quarter. They also had a record week in the first quarter with online sales hitting 256,000 orders being processed in a single week. Coupe said that the "convenience business remains in double-digit growth and we have opened ten convenience stores during the quarter."

Further the investment in a multichannel approach appears to be the way forward for the retailer and the path to recovery.

"Despite the challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy. We continue to invest in our broad range of products and services and our multiple channels to market. These areas represent strong future growth opportunities and contribute towards our resilience in the current trading environment," said Coupe.

According to Kantar Worldpanel's most recent figures released at the beginning of the month, Sainsbury's has been able to hold its market share of 16.5% while other major retailers, like Tesco and Asda, have been losing ground to discounters Aldi and Lidl.